Feds Raid Online Drug Market Silk Road

U.S. law enforcement officials have shut down down Silk Road, the online drug market, following a raid and an arrest of Ross William Ulbricht, the site’s alleged proprietor.

According to a Justice Department release, Ulbricht, 29, was arrested in San Francisco and will be presented in San Francisco federal court Wednesday morning. Until Wednesday, the person who ran the site was known only by the pseudonym “Dread Pirate Roberts.”

In addition to arresting Ulbricht, the Federal Bureau of Investigation seized approximately $3.6 million in Bitcoin, making it the second biggest seizure in the digital currency’s history.

Federal prosecutors in New York charged Ulbricht with narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy. A criminal complaint also alleges that in March 2013, Ulbricht engaged in a “murder-for-hire” scheme where he enlisted one Silk Road user to murder another Silk Road user who was threatening to release the identities of all of the website’s users.

The operation that led to Ulbricht’s arrest was a collaboration between the FBI, police, and prosecutors in the Southern District of New York; since November 2011, agents claim to have made over 100 different drug purchases through Silk Road. The complaint estimates that Silk Road has processed transactions worth over a total of 9.5 million Bitcoins, which adds up to roughly $1.2 billion in sales.

Ulbricht “deliberately set out to establish an online criminal marketplace outside the reach of law enforcement or governmental regulation,” FBI agent Christopher Tarbell said in the criminal complaint.

Silk Road, where cocaine and heroin were trafficked, is an online drug marketplace that exists on the “Deep Web,” a portion of the Internet that is hidden from typical browsers and not indexed by search engines. Silk Road and other websites on the Deep Web are accessible only through a special anonymized browser named Tor. Because of the privacy the Deep Web affords, corners of it have become home to thriving online black markets, with Silk Road being the most infamous.

Ulbricht will appear before Judge Joseph C. Spero in San Francisco federal court for a detention hearing at 9:30 a.m. PDT on Friday, October 4.